Outsourcing Сomplex Engineering Projects: Finding Balance of Benefits and Risks
If you've ever considered outsourcing your product design or complex hardware and software projects but hesitated, you're not alone. It can be difficult, especially if you've never done so or have faced trouble in the past. In this article, I will address the most common concerns based on our experience and customer feedback.
Promwad worked with hundreds of companies on the outsourcing model: from small start-ups looking for a quick time-to-market to large corporations. Outsourcing was particularly effective for companies aiming for quick scalability but facing shortages of in-house engineers or skills, looking for rare expertise or seeking ways to reduce design costs.
We interviewed dozens of our clients who have decided on outsourcing IT development. We wanted to identify the reasons why they decided to engage contractors and to determine how this cooperation has worked out. Through these conversations, we compiled a list of five benefits and challenges our clients faced along the way. Let's explore each of them.
1. Time: shorter timeframes and faster time to market
Reducing development time by engaging a third-party engineering team is the most obvious and "tangible" benefit of IT outsourcing. A company can delegate development tasks to its contractor in order to focus its in-house team on its non-development tasks, such as marketing and strategy.
At the same time, with the involvement of contractors also comes the risks of delay and loss of control. At Promwad, we deal with it as part of risk management by considering technical challenges, supply chain disruptions, and unexpected obstacles that could affect the timeline and delivery of projects. We offer our clients effective project management, contingency planning and risk mitigation strategies to ensure timely project completion.
Here's one of many cases where we effectively planned the time to create a product and helped bring it to market quickly:
Case Study: Design of Intelligent Speed Assistance (ISA) Device
Client & Challenge: Voovoo is a Georgian-Latvian technology startup that provides real-time regulation of driving as a service for car-sharing companies. They turned to us to design a device that helps reduce the vehicle's speed by controlling the engine's power, resulting in increased safety on the road.
Our client Vaho Iashvili holds a VOOBOX board on device testing with a large carsharing company OX Drive in Latvia. Source: Youtube by VOOVOO
Read more about the design of the ISA device and the storу of its entry into the European market.
2. Costs: optimising the price of development
By outsourcing electronics or software development, companies can optimise their cost by using the expertise and infrastructure of external partners without the need for significant pre-investments in specialised equipment, facilities and production maintenance.
However, there are potential hidden costs and unforeseen expenses, such as currency fluctuations, pricing structure adjustments, not to mention the potential for the budget to grow as new tasks arise during the development process. To minimise the impact of the above factors, we offer our clients robust project management practices, including open communication of costs and potential financial risks.
Some of our clients believed that the fixed price model was the best protection from possible budget changes. However, this is not always a favourable option, as the final price may be 30-50% higher than in a time and materials contract. I have already written about choosing the optimal model of cooperation and explained why the best option for starting out with new contractors may be a pilot project.
In any case, we are always ready to help the client with the necessary calculations and detailed estimates at the start, so that they can compare our offer with the cost and terms of project implementation by their in-house team (or any other team).
3. Quality and skills: how to ensure the right level
In the electronics design industry, some skills and knowledge are rare and highly specialised. Outsourcing gives companies the ability to quickly find and use those unique skills without extensive hiring efforts or investment in training. As our customers say, Promwad for them is a one-stop design partner that can cover all stages of device design and manufacturing, even such challenges as FPGA design, ASIC verification, or knowledge of specific programming languages or protocols.
Also, it is not easy to maintain a stable high level of delivery quality during the entire project. We place great focus on transparency of the design process and quality control by following the best ISO9001 practices and other industry standards, while constantly improving through regular training and audits of our processes. Rigorous quality control is established at every project stage, including routine testing and reporting to the client.
Here is one of the projects where our engineering expertise helped our client to solve their challenge.
Case study: Firmware Development for a Bicycle Computer
Client & Challenge: Jespr, a Swiss start-up company digitalising the cycling industry, turned to us to develop firmware for a bicycle computer. Our engineers had extensive experience in firmware development, including automotive and other solutions for city mobility.
The Jespr bicycle computer made in Switzerland with the firmware developed at Promwad
Result: We developed firmware, designed new hardware (accelerometer, touch screen drivers) and implemented a kiosk mode. Our client was able to close the experience gap by connecting our engineers and focused on their core expertise. Read more about this case study.
4. Collaboration: working effectively with a remote team
One of the key advantages of electronics design outsourcing is flexibility in terms of geographical location. Businesses have access to a wider range of expertise and can use experts that may not be available locally. Whether it's software development or PCB layout design, companies can find specialists to meet unique project requirements.
To ensure that communication is effective regardless of the distance between the client and the vendor, we at Promwad establish clear communication channels, regular checkpoints, and feedback mechanisms to resolve problems promptly from the very beginning of the project. Most of our clients have noted our flexibility and commitment to seamless integration into their infrastructure and workflows.
Here is just one example when our client and the Promwad team successfully completed a project by collaborating across continents and time zones.
Case study: Implementing OCPP for Charging Stations
Client & Challenge: Proterra, an American EV technology company focused on the transport electrification, turned to us to implement the OCPP (Open Charge Point Protocol) and optimise the code and device used in their charging stations.
Charging station with OCPP implemented by Promwad
Result: Our client received a device to more efficiently manage their electric vehicle charging infrastructure, reduce downtime and improve performance. We refactored and fixed bugs in the existing firmware and used a Linux kernel driver to improve the performance, reliability and ease of maintenance of the device. The implementation of OCPP made the device compatible with various CSMS.
Read more about OCPP implementation for charging stations.
5. Trust: how to secure your know-how
NDA and other contractual agreements and stringent security measures, reduce a risk of unauthorised access, leakage of proprietary information or even theft of intellectual property. We take comprehensive security measures to keep sensitive data confidential throughout the entire project lifecycle.
We offer to our clients proactive measures to delineate confidential information and limit access to proprietary know-how. This may include restricting access to certain data or resources, implementing access and authorisation controls, and establishing protocols for dealing with confidential information. As part of our standard service, we provide our clients with an NDA and contract.
In addition to legal protection and access control, Promwad strives to build a culture of trust and transparency. Clear communication, mutual respect and cooperation are essential to our corporate culture. Here we have described in detail how to protect your IP while outsourcing embedded software and electronics design.
Bottom line
Outsourcing IT solutions offers a safe, convenient, and profitable model for tackling complex engineering projects, if you do a good job with risk management, planning and protecting your IP.
For 20 years Promwad has been helping its clients worldwide to avoid risks of outsourcing IT services and reap its benefits reducing time to market, optimising development costs and closing gaps in expertise. Just take a look at our portfolio or client reviews. We are always ready to schedule an intro call with you to discuss how we can help you solve your specific business problem.
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